The VA Is a Terrible Landlord

Agency forgets to collect rent—vets pay the price

In Los Angeles, the American Civil Liberties Union is suing the U.S. Department of Veterans Affairs on behalf of a group of homeless vets....

In Los Angeles, the American Civil Liberties Union is suing the U.S. Department of Veterans Affairs on behalf of a group of homeless vets. The suit alleges that VA officials in California leased agency-owned land that was supposed to shelter homeless veterans.

Wealthy Californians donated the land to the VA more than 100 years ago for the specific purpose of housing homeless vets. And for 80 years, that’s exactly what the agency did. But since the 1980s, the VA has been leasing much of the property to private companies—golf courses, a rental car firm and a hotel’s laundry facility.

“The VA has not publicly disclosed how much it is being paid for these private deals or where the money from them is going,” the ACLU’s lawyers claimed in the suit.

A new report from the Government Accountability Office provides some of the depressing answers. The VA won’t account for the land in question because it can’t. The agency doesn’t do a very good job of tracking its lease agreements. The VA doesn’t audit the land deals and—in some cases—the tenants aren’t even paying their rent.

The VA owns a lot of land—7,400 properties on 35,000 acres. That’s more real estate than the agency has a use for. Priorities change, buildings fall into disuse and treatment centers close or move.

To avoid wasting land, Congress has allowed the VA to lease out its unused property. In practice, this means the VA becomes a landlord for private companies. Congress requires the veterans agency to collect rent or some other form of in-kind payment.

If the VA leases to a laundromat, for example, that laundromat should then offer free or discounted services to veterans.

It sounds like a great idea. The VA leases out unused property then collects cash or services that go toward helping out vets. But there’s a problem. The VA is a terrible landlord. The agency forgets to collect rent or renew leases.

That leaves millions of dollars on the table. Millions of dollars that the VA should be spending on veterans.

A postcard from the good old days of U.S. veterans affairs. Boston Public Library photo via Flickr

The revelations about the VA’s awful business practices come from an August report by the Government Accountability Office. The GAO sent investigators to three cities—New York, Chicago and Los Angeles—to audit the VA’s lease agreements. The investigators uncovered a mountain of mismanaged leases. Every city had problems.

In New York, the investigators discovered that the VA had stopped billing one of its tenets several years ago. The tenants quit paying—but stayed in the space. It took the VA years to figure out its tenants were screwing it.

Today the delinquents are on a payment plan. They still owe $200,000 in back rent.

New York was bad, but the VA’s handling of its properties in West Los Angeles is a master class in gross negligence.

The agency owns almost 400 acres of West LA. The City of Los Angeles maintains parks on 12 acres of VA land—and has since the 1980s. The GAO investigators learned that the city built the parks without ever asking the VA. No money ever changed hands.

In another instance, the VA misfiled $500,000 in rent on its West LA properties. The money went to janitors’ salaries, according to agency officials. According to Congress’ rules, the VA is supposed to spend any money it earns from the land on vets. Not janitors.

In March last year, an LA country club used a portion of the VA’s 400 acres for overflow parking during a PGA tournament. Another one of the golf courses on VA-owned land is doing so well that it’s installed an expensive new sprinkler system to keep the greens lush.

According to the rules of the leases, the VA should be approving and managing any new developments on its land. Investigators found that VA officials had never even heard about the sprinkler system.

This is all par for the course for the VA. Earlier this year, news broke that dozens of veterans died while awaiting treatment at a Phoenix, Arizona veterans hospital. Some VA leaders resigned and the FBI opened a criminal investigation. In June, Congress approved more funds for the VA.

But the extra cash won’t matter if the people in charge can’t even track it. The VA is broken. More money won’t necessarily fix it.

No veteran should sleep on the street while private companies use the land set aside for his care to build parking lots.

When the GAO investigators pressed VA officials about this negligence, their response was telling. “[The VA] did not perform systematic reviews of the billing and collection practices … and had not established mechanisms to do so.”